Exit Strategy. Exit of BAS from countries should not be overly prescriptive but will take into account key measures regarding the development of the local market

for consultancy as well as institutional infrastructure to support SMEs. As a general rule, BAS follows EBRD’s principles in determining its interventions and assessing whether they are still needed – operations will be phased out when the programme is no longer additional and does not generate transition impact. In terms of implementation, this entails a distinction between: decision making at the project level; and decision making at the sector level within a country.

At the project level, actual and potential BAS projects are scrutinised for additionality and transition impact. A lower additionality score translates into a lower grant amount as a percentage of the total cost as guided by the GGM.

At the sector level, determining when sustainability has been achieved is not about saturation of the market for business advisory services, but rather about assessing when the demonstration effects of BAS have led to the creation of a self-sustaining market – both supply and demand – for these services. Over time BAS will focus on the consolidation of the local market by facilitating the growth of associations of consultants, supporting business intermediaries or other institutional bodies set up to support the MSME sectors.

This can only happen once there is a sufficient level of maturity in terms of supply of advisory services and corresponding demand. The maturity of the market will be assessed regularly and when the Bank finds that that BAS is no longer additional or interventions no longer have potential transition impact in any market segment, the BAS will phase out operations in that country.

In sum, as a country’s ranking of the infrastructure of MSME support and consultancy market maturity moves from high to low transition challenges, BAS will gradually lower the grant amount, shift focus to market segments that remain additional, for example advisory services geared to energy efficiency and environmental management, and focus on the formalisation of the consultancy industry – with an overall view to phasing out operations in the country. Bulgaria, Croatia and Romania are expected to graduate from BAS during the CRR4 period, barring unexpected developments (new tasks being requested of BAS).

EGP operations have always depended on the interest of donors and have varied widely in their intensity and continuity. Going forward, EGP should be available as an instrument for the Bank to offer its clients in all of the countries of Western Balkans, ETC, Kazakhstan, Ukraine, and selected Russian regions. It should be noted that EGP has not been operating in Bulgaria and Romania since the last Small Business Support Strategic Plan, while operations in Croatia continue thanks to EU and bilateral donor support. While the SME consultancy business is reasonably well developed, there is still a huge need for corporate restructuring in Croatia, and EGP is still very much in demand. However, over time, a gradual escalation in cost recovery for EGP projects can be expected in this market. As in the case of BAS, it is appropriate to consider phasing out of the EGP in this advanced market in line with previous practice in EU-8 Member States.

VII. CONCLUSION

The EGP and BAS are and should remain important tools for supporting the development of the private sector in the countries of operations. The fact that the Bank is taking greater ownership of the programmes, by providing increasing support through the Bank’s budget for their management and overheads, enables precious donor funding to be concentrated on projects. The closer relationship with Banking provides tremendous synergies – on one side, ensuring that EGP and BAS are aligned with the Bank’s perception of the priority needs of the private clients, and on the other, enabling the Bank to achieve progress on numerous cross-cutting objectives (women in business, rural development, etc. ) which may be challenging to address in mainstream operations. At the same time, the programmes’ ongoing collaboration with donors and local stakeholders will ensure that they reflect the interests and objectives of key partners in both the countries of operations and in the donor countries.

This new Strategy provides a financial scenario which will need to evolve in line with the funding which proves available over the coming period. The Team will keep the Board and management informed on progress on cost-recovery and cost savings during the period. At the same time, it is important that there be agreement to underwrite basic operations for the programmes’ financial sustainability.

Country TAM/BAS Donors Albania

Canada, EU Private Sector Support Facility for the Western Balkans, EU, Japan, Luxembourg, Netherlands, Portugal, UK, EBRD Special Shareholder Fund, EBRD Western Balkans Fund Armenia

Canada, ETC Fund, EU EuropeAid, EU Eastern Partnership (proposed), Taipei China, UK, USAID, EBRD Special Shareholder Fund

Azerbaijan

Austria, Belgium, Canada, ETC Fund, EU EuropeAid, EU Eastern Partnership (proposed), France, Germany, Ireland, Italy, Korea, Netherlands, Switzerland, Taipei China, UK, EBRD Special Shareholder Fund

Belarus

EU Eastern Partnership (proposed), Finland, Germany, Italy, Japan, Netherlands, Norway, Sweden, United Kingdom

Bosnia and Herzegovina

BRSF Balkan Region Special Fund (Norway), Canada, Denmark, EU IPA, EU PHARE, Italy, Japan, Netherlands, Portugal, Spain, Switzerland, UK, EBRD Special Shareholder Fund, EBRD Western Balkans Fund

Bulgaria

Austria, Belgium, BRSF Balkan Region Special Fund, EU PHARE, Italy, Japan, Luxembourg, Portugal, UK

Croatia

Austria, BRSF Balkan Region Special Fund, EU IPA, EU Private Sector Support Facility for the Western Balkans, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Sweden, Switzerland, Taipei China, UK, EBRD Special Shareholder Fund

Czech Republic EU PHARE, Italy, Spain

Estonia BTASF Baltic Technical Assistance Special Fund, EU PHARE, EU

FYR Macedonia

BRSF Balkan Region Special Fund, Denmark, EU EAR, EU IPA, EU PHARE, EU SME Framework, EU Private Sector Support Facility for the Western Balkans, Ireland, Italy, Japan, Luxembourg, Netherlands, Portugal, Sweden, Switzerland, UK, EBRD Special Shareholder Fund

Georgia

Canada, ETC Fund, EU EuropeAid, EU Eastern Partnership (proposed), EU TACIS, Italy, Japan, Netherlands, Switzerland, Taipei China, UK, EBRD Special Shareholder Fund

Hungary Denmark, EU PHARE, Japan, Luxembourg, Taipei China, UK

Kazakhstan Austria, Belgium, EU TACIS, Japan, Switzerland, EBRD Special Shareholder Fund Kosovo

Denmark, EU EAR, EU, Italy, Netherlands, Portugal, EBRD Special Shareholder Fund, EBRD Western Balkans Fund

Kyrgyz Republic

Belgium, Canada, ETC Fund, EU, Italy, Japan, Luxembourg, Netherlands, Switzerland, Taipei China, UK, Switzerland, EBRD Special Shareholder Fund

Latvia BTASF Baltic Technical Assistance Special Fund, EU PHARE, EU Lithuania BTASF Baltic Technical Assistance Special Fund, EU PHARE, EU Moldova

Belgium, Denmark, ETC Fund, EU TACIS, EU Eastern Partnership (proposed), France, Italy, Japan, Netherlands, Sweden, Switzerland, Taipei China, UK, EBRD Special Shareholder Fund Mongolia

Energy Resources LLC, Japan, Korea, Luxembourg, Taipei China, EBRD Mongolian Cooperation Fund, EBRD Special Shareholder Fund

Montenegro

Austria, Canada, Denmark, EU EAR, EU Private Sector Support Facility for the Western Balkans, Greece, Italy, Japan, Luxembourg, Netherlands, Switzerland

Poland Austria, Denmark, EU PHARE, Switzerland

Romania Austria, Belgium, Canada, EU PHARE, France, Italy, Japan, Luxembourg, UK

Russian Federation

Austria, Canada, Denmark, EU, Finland, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Nordic Council Technical Cooperation, Norway, Sweden, Switzerland, Taipei China, TARU, UK, USA, EBRD Special Shareholder Fund

Serbia

Austria, Canada, Denmark, EU, Greece, Ireland, Italy, Japan, Netherlands, Spain, Sweden, Taipei China, UK

Slovak Republic EU PHARE, Greece, Netherlands, Sweden Slovenia

Denmark, EU PHARE, EU, GEF, Greece, Italy, Japan, Spain, Switzerland

Tajikistan

Belgium, Canada, ETC Fund, EU, FAO, Japan, Luxembourg, Switzerland, EBRD Special Shareholder Fund

Turkey EU IPA, EU Private Sector Support Facility for Turkey Turkmenistan ETCF (proposed), Ireland, EBRD Special Shareholder Fund

Ukraine

Austria, Belgium, Canada, Denmark, EU, EU Eastern Partnership (proposed), EU TACIS, Finland, Germany, Greece, Italy, Japan, Luxembourg, Netherlands, Switzerland, Taipei China, UK, EBRD Special Shareholder Fund

Uzbekistan

Austria, Belgium, Denmark, ETC Fund, EU TACIS, Germany, Japan, Korea, Luxembourg, Switzerland, UK, EBRD Special Shareholder Fund